Appendix A1 to the simplified modalities and procedures for small-scale CDM project activities

CLEAN DEVELOPMENT MECHANISM

SIMPLIFIED PROJECT DESIGN DOCUMENT FOR SMALL SCALE PROJECT ACTIVITIES (SSC-PDD)

Version 01 (21 January, 2003)

Introductory Note

1. This document contains the clean development mechanism project design document for small-scale project activities (SSC-PDD). It elaborates on the outline of information in appendix B “Project Design Document” to the CDM modalities and procedures (annex to decision 17/CP.7 contained in document FCCC/CP/2001/13/Add.2) and reflects the simplified modalities and procedures (herewith referred as simplified M&P) for small-scale CDM project activities (annex II to decision 21/CP.8 contained in document FCCC/CP/2002/7/Add.3).

2. The SSC-PDD can be obtained electronically through the UNFCCC CDM web site (http://unfccc.int/cdm/ssc.htm), by e-mail (cdm-info@unfccc.int) or in print from the UNFCCC secretariat (Fax: +49-228-8151999).

3. Explanations for project participants are in italicized font (e.g. explanation).

4. The Executive Board may revise the SSC-PDD if necessary. Revisions shall not affect small-scale CDM project activities validated prior to the date at which a revised version of the SSC-PDD enters into effect. Versions of the SSC-PDD shall be consecutively numbered and dated. The SSC-PDD will be available on the UNFCCC CDM web site in all six official languages of the United Nations.

5. In accordance with the CDM modalities and procedures, the working language of the Board is English. The completed SSC-PDD shall therefore be submitted to the Executive Board in English.

6. Small-scale activities submitted as a bundle, in accordance with paragraphs 9 (a) and 19 of the simplified M&P for small-scale CDM project activities, may complete a single SSC-PDD provided that information regarding A.3 (Project participants) and A.4.1 (Location of the project activity) is completed for each project activity and that an overall monitoring plan is provided in section D.

7. A small-scale project activity with different components eligible to be proposed2 as a small-scale CDM project activity may submit one SSC-PDD, provided that information regarding subsections A.4.2 (Type and category(ies) and technology of project activity), and A.4.3 (brief statement on how anthropogenic emissions of greenhouse gases (GHGs) by

1 This appendix has been developed in accordance with the simplified modalities and procedures for small-scale CDM project activities (contained in annex II to decision 21/CP.8, see document FCCC/CP/2002/7/Add.3) and it constitutes appendix A to that document. For the full text of the annex II to decision 21/CP.8 please see http://unfccc.int/cdm/ssc.htm). 2 In paragraph 7 of simplified M&P for small-scale CDM project activities, on clarifications by the Executive Board on small-scale CDM project activities, the Board agreed that in a project activity with more than one component that will benefit from simplified CDM modalities and procedures, each component shall meet the threshold criterion of each applicable type, e.g. for a project with both a renewable energy and an energy efficiency component, the renewable energy component shall meet the criterion for “renewable energy” and the energy efficiency component that for “energy efficiency”.

sources are to be reduced by the proposed CDM project activity) and sections B (Baseline methodology), D (Monitoring methodology and plan) and E (Calculation of GHG emission reductions by sources) is provided separately for each of the components of the project activity.

8. If the project activity does not fit any of the project categories in appendix B of the simplified M&P for small-scale CDM project activities, project proponents may propose additional project categories for consideration by the Executive Board, in accordance to paragraphs 15 and 16 of the simplified M&P for small-scale CDM project activities. The project design document should, however, only be submitted to the Executive Board for consideration after it has amended appendix B as necessary.

9. A glossary of terms may be found on the UNFCCC CDM web site or from the UNFCCC secretariat by e-mail (cdm-info@unfccc.int) or in print (Fax: +49-228-8151999).

CONTENTS A. General description of project activity B. Baseline methodology C. Duration of the project activity / Crediting period D. Monitoring methodology and plan E. Calculation of GHG emission reductions by sources F. Environmental impacts G. Stakeholders comments Annexes Annex 1: Information on participants in the project activity Annex 2: Information regarding public funding

Annex-3: Baseline Data

Appendix

Appendix A: Abbreviations

Appendix B: Reference List

Enclosures

Enclosure: Baseline calculations

A. General description of project activity

A.1 Title of the project activity:

APCL proposed 7.5 MW Mustard Crop Residue based Power Project

A.2 Description of the project activity:

The purpose of the project essentially is to utilize available biomass (mustard crop residue) in

the region effectively for generation of electricity. The generated electricity will be sold to

state grid for further distribution to end-users. The objective of the project activity would

therefore be to contribute to the sustainable economic growth of the rural project region and

conserve the environment through use of renewable biomass fuel and Green House Gas

(GHG) emission reduction. The project will also help to bridge the ever-increasing demand

and supply gap of electricity in the state of Rajasthan.

The project activity will generate employment and help reduce the unemployment of the local

area. The project will also provide economic value to agricultural wastes and will provide

stable and quality power to local industry, farmers and households. The project will create a

business opportunity for local stakeholders such as bankers/ consultants, suppliers /

manufacturers, contractors, etc. Besides these, the following local benefits are also envisaged

due to the setting up of project:

Ø Proper utilization of surplus biomass;

Ø Avoidance of burning of agriculture waste; and

Ø Generation of eco-friendly green power;

Ø Reduction of CO2 emissions

The promoters perceive that by setting up the biomass-based power plant, they will be

participating in contributing to power generation in the state using non-conventional energy

resources, hitherto going waste.

The primary fuel for the proposed power plant is Mustard Crop Residue (MCR); other

biomass fuel, such as sawdust, soft wood, rice husk may be used as available.

APCL proposes to utilize the fuel available at Alwar district. The fuel will be brought in

directly to the collection centers by the farmers themselves. APCL can also utilize the

services of some fuel suppliers for the supply of MCR.

The total requirement of mustard waste has been estimated to be 79,131 MT/annum at 100%

capacity utilisation for the proposed project. However, the total surplus crop residue after

discounting for various end-uses, available within a radius of 25 km is estimated to be

1,11,800 MT/annum and within 50 km radius more than 4,97,234 MT/annum and has a

potential of generating renewable energy to a tune of around 45 MW. For convenient and cost

effective collection and transportation of raw material, additional few collection centres may

be developed in villages having high density of mustard crop with in 15-25 km radius from

the proposed project site.

The availability of MCR in Rajasthan state specially in Alwar district is rather significant as

stated above, mainly because there are no alternative uses of this biomass. Since, it is bitter in

taste, it cannot be used as fodder for the cattle. The lack of logistics for transportation of the

material, mainly due to low density and high volume, is the sole biggest reason why the

biomass will continue to remain available primarily for burning. A large quantity of this

biomass is burnt in the fields to make room for the new crop following a completely dry

period between the harvesting of mustard and the onset of the rainy season.

The project activity will contribute to the ‘Sustainable Development of India’ in following

ways:

The project activity is a renewable energy based power project, with MCR as primary fuel,

husk & saw dust etc. as secondary fuel. The project will export clean power to Rajasthan

Rajya Vidyut Prasaran Nigam Ltd (RVPN). This electricity generation will substitute the

power generation mix of the state grid consisting of conventional fossil fuels. Thus, it will

reduce the CO2 emission and will also conserve the conventional fuel.

The project will create jobs, and the sale of MCR to the project will generate additional

revenue for the economically backward villagers. The effort, therefore, is more satisfying

since this will help the rural upliftment of the farmers in the project region, and is consistent

with the Government’s Rural Development Programme.

Indian economy is highly dependent on “Coal” as fuel to generate energy and for production

processes. Thermal power plants are the major consumers of coal in India, and yet the basic

electricity needs of a large section of population are not being met. This results in excessive

demands for electricity and place immense stress on the environment. Changing coal

consumption patterns will require a multi-pronged strategy focusing on demand, reducing

wastage of energy and the optimum use of Renewable Energy (RE) sources.

Since this project activity utilizes renewable energy source, it will positively contribute

towards the reduction in use of finite natural resource like coal/gas/oil, minimizing depletion

or else increasing its availability to other important processes.

The project activity, by feeding clean power to grid will eliminate an equivalent Carbon

Dioxide (CO2), which would be generated to produce electricity to cater to the electricity

requirement. Therefore, this project activity has excellent environment benefits in terms of

reduction in GHG emissions and coal resource conservation.

This project activity is in the rural setting and will contribute to the environmental and social

issues locally and globally through:

Ø Export of 7.5 MW power, thereby eliminating the generation of same quantity of power using conventional fuel

Ø Conserving Coal, a non-renewable natural resource

Ø Making coal available for other important applications

Ø Reducing GHG (Carbon Dioxide)

Ø Contributing to a small increase in the local employment in the area of skilled / unskilled jobs for operation and maintenance of the plant and equipment

Ø Capacity building of local people operation of modern technology power generation.

A.3 Project participants:

Ø Alwar Power Company (P) Limited, A-7/3, DLF Qutab Enclave, Phase-I, Gurgaon-

122002, Haryana

Ø Ministry of Environment and Forest, India (DNA)

Ø Austrian Federal Ministry of Agriculture, Forestry, Environment and Water

Management (Austrian JI/CDM Programme) for which the programme manager is

Kommunalkredit Public Consulting GmbH. Climate and Energy,

Tuerkenstrasse 9, A-1092 Vienna, Austria;

Alwar Power Company (P) Limited is the official contact for this CDM project

activity.

A.4 Technical description of the project activity:

A.4.1 Location of the project activity:

A.4.1.1 Host country Party (ies): India

A.4.1.2 Region/State/Province etc.: Rajasthan

A.4.1.3 City/Town/Community etc: Alwar

A.4.1.4 Detailed description of the physical location, including information allowing the unique identification of this project activity

The project is being implanted at Alwar Power Company (P) Ltd., Matsya Industrial Estate,

District Alwar, Rajasthan. The proposed site is located about 8 km from Alwar City. The site

measuring about 34 acres has already been acquired. The nearest Railway station is Alwar.

Power generated from the plant will be evacuated to RVPN grid through their 132 kV sub

station, which is less than 500 m from the plant.

A.4.2 Type and category (ies) and technology of project activity

Main Category: Type I - Renewable Energy Power project

Sub Category: “D” Electricity Generation for a Grid (Biomass based Power

Project)

The project activity meets all the applicability criteria of small-scale CDM project activity

category under Type-I: Renewable Energy Projects (D. Renewable electricity generation for

a grid) of the indicative simplified baseline and monitoring methodologies for selected small-

scale CDM project activity categories

As per the provisions of Appendix B of Simplified Modalities and Procedures for Small Scale

CDM Project Activities, (Version 03) Type ID “comprises renewables, such as photovoltaics,

hydro, tidal/wave, wind, geothermal, and biomass, that supply electricity to an electricity

distribution system that is or would have been supplied by at least one fossil fuel or non-

renewable biomass fired generating unit ”. “If the unit added co-fires [non-] renewable

biomass and fossil fuel, the capacity of the entire unit shall not exceed the limit of 15MW.”

Project is a grid-connected biomass based 7.5 MW power plant with high-pressure steam

turbine configuration, which is below the required power capacity cap of 15MW. Therefore

we may conclude that the Type I.D. is the most appropriate category for the project under

discussion.

The baseline and emission reductions calculations from the project would therefore be based

on paragraph 29 of Appendix B. The monitoring methodology would be based on the

guidance provided in the paragraph 31 of Appendix B.

The proposed plant will have boiler sized to produce a maximum of 38 TPH of steam and

steam turbine, which will be a multistage, extraction cum condensing type machine. The

steam conditions at the boiler heat outlet are a pressure of 66 kg/cm2 and temperature of 485 +

5 0C. Traveling grate type boiler has been selected, primarily due to its flexibility in fuel firing

in terms of its capability to burn fuels of practically any type and size and high moisture

content. This type of boiler has other incidental advantages like lower power consumption,

reduced dust emissions in flue gas, etc. All the necessary auxiliary facilities of the power

plant including water demineralization plant, recirculating cooling water system, fuel storage

and handling systems, electrical power evacuation system, ash handling system, fire fighting

system, compressed air system, instrumentation and control system etc. will be provided for

the power plant. The plant and equipment facilities will be designed to comply with the

applicable stipulations / guidelines of statutory authorities such as State Pollution Control

Board etc. Power generated from the plant will be evacuated to Rajasthan Rajya Vidyut

Prasaran Nigam Ltd. (RVPN) grid through their 132 kV sub station, which is les than 500 m

from the plant.

Combustion technology is selected for the power plant, wherein biomass is burnt as fuel in a

steam generator to produce high-pressure steam, which is then expanded in turbo-generators

to generate power. The technology proposed is easily available in India from reputed

manufacturers and is well proven worldwide.

In India, till date, only one plant based on MCR as primary fuel, has been commissioned3.

This will be the second project of this type in India.

The Manager who will be supported by administrative staff, the shift incharge, and the

operation & maintenance staff will head the plant.

A.4.3 Brief statement on how anthropogenic emissions of greenhouse gases (GHGs) by sources are to be reduced by the proposed CDM project activity:

The project will use sustainably grown biomass as fuel and incase of exigencies it will use

coal as fuel. The GHG emissions from the biomass combustion process, mainly CO2, are

consumed by plant species, representing a cyclic process. Since, the biomass contains only

negligible quantities of other elements like Nitrogen, Sulphur etc. release of other GHG are

considered as negligible The biomass is CO2 neutral and thus environmentally benign,

limiting greenhouse effect.

Without the proposed project activity, the same energy load would have been supplied to the

grid customers from a mix of fossil-fuel based thermal power plants. Emission of CO2 would

have occurred due to combustion of conventional fuels like coal by the state grid.

The Rajasthan grid relies heavily on coal, as does most of India, and this reliance is predicted

to increase overtime given the significant power shortages and exponential demand growth in

Rajasthan. As per the future energy requirement and peak demand projections by Central

Electrical Authority (CEA) 16th power survey, the expected rise in energy requirement is

about 7.18% and demand of power is about 7.30% per annum. 3 Kalpataru Power Transmission Limited commissioned in October 2003

The Project will therefore reduce the combined margin carbon intensity of the grid (i.e. the

average carbon intensity of the operating margin and the built margin) given the generation

mix of the grid. In the project scenario, the Rajasthan Grid’s conventional energy equivalent

of 301.3 Million kWh for the first crediting period of 7 years would be replaced by power

generated from the 7.5 MW non-conventional renewable sources biomass based power plant.

The project will thereby result in CO2 emission reduction of 277,196 tonnes over the first 7

year crediting period.

No transmission and distribution losses have been considered since the project will export

power at high voltage of 132 kV at a short distance.

A.4.4 Public funding of the project activity:

No public funding from parties included in Annex-I is proposed for the project.

A.4.5 Confirmation that the small-scale project activity is not a debundled component of a larger project activity:

The biomass power plant is not a debundled component of a large project activity as the

project proponents:

Ø do not propose another biomass power plant with higher capacity;

Ø have not registered within the previous two years; and

Ø Project boundary is not within 1 km radius of any other proposed small-scale activity.

B. Baseline methodology

B.1 Title and reference of the project category applicable to the project activity:

The project activity meets the eligibility criteria to use simplified modalities and procedure

for small-scale CDM project activities as set out in paragraph 6(c) of decision 17/CP.7.

Details of approved methodology for baseline calculations for CDM projects of capacity less

than 15 MW is available in the “Appendix B of the simplified modalities and procedure for

small scale CDM project activities”. Reference has been taken from indicative simplified

baseline and monitoring methodologies for selected small scale (CDM projects less than 15

MW) project activity categories.

Renewable technologies that supply electricity to the grid are covered in category I.D. The

category comprises renewable such as hydro, wind, geothermal and biomass that supply

electricity to an electricity distribution system that is or would have been supplied by at least

one fossil fuel or nonrenewable biomass fired generation unit.

Main Category: Type I - Renewable Energy Power project

Sub Category: I. D. Electricity Generation for a Grid (Biomass based Power Project)

B.2 Project category applicable to the project activity:

Project will use surplus biomass available as a fuel to generate electricity and export to RVPN

grid. As stated above in the baseline scenario, in absence of the proposed project the same

energy load would be met by the operating and future generation mix of RVPN grid (which is

dominated by coal and gas based power projects). The baseline emissions from the most

likely baseline scenario are in line with the guidance provided in Appendix B.

The guidance given in ‘Appendix B of the simplified M&P for small-scale CDM project

activities’s of the UNFCCC CDM website, provides indicative simplified baseline and

monitoring methodologies for selected small-scale CDM project activity categories guidelines

for preparation of Project Design Document (PDD) including baseline calculations. As

mentioned above in Section A.4.2, the proposed project activity falls under Type I.D –

Renewable electricity generation for a grid.

Baseline methodology for projects under Type I. D has been detailed in point no. 29 of the

above mentioned document. It states that the baseline is the kWh produced by the renewable

generating unit multiplied by an emission coefficient (measured in kgCO2/kWh) calculated in

a transparent and conservative manner as:

a) The average of the “approximate operating margin” and the “build margin”, where:

i. The “approximate operating margin” is the weighted average emissions (in

kgCO2equ/kWh) of all generating sources surviving the system, excluding

hydro, geothermal, wind, low-cost biomass, nuclear and solar generation;

ii. The “build margin” is the weighted average emissions (in kgCO2equ/kWh) of

recent capacity additions to the system, defined as the higher (in MWh) of

most recent 20% of plants built or the 5 most recent plants; The

“approximate operating margin” is the weighted average emissions (in kg

CO2equ/kWh) of all generating sources serving the system, excluding hydro,

geothermal, wind, low-cost biomass, nuclear and solar generation;

OR

b) The weighted average emissions (in kgCO2equ/kWh) of current generation mix.

Therefore we may conclude that the project may use the ‘applicable baseline

calculation for the Type I-D Project category. Hence, the baseline emissions

calculated using “The average of the approximate operating margin and the build

margin”, represent the realistic anthropogenic emissions by sources that would occur in

absence of the project activity.

B.3 Description of how the anthropogenic GHG emissions by sources are reduced below those that would have occurred in the absence of the proposed CDM project activity

As per the decision 17/cp.7 para 43, a CDM project activity is additional if anthropogenic

emissions of greenhouse gases by sources are reduced below those that would have occurred

in the absence of the registered CDM project activity.

The Appendix B of the simplified M&P for small-scale CDM project activities’s of the

UNFCCC requires the project activity to determine its additionality as per the guidance

provided in Attachment A to Appendix B.

In order to establish the project activity is additional, APCL identified plausible project

options, which include all possible courses of actions that could be adopted in order to

produce electricity for the end –users of the Rajasthan State. These plausible options were

further analysed as per the guidance in Attachment A to Appendix B of the small scale

modalities and procedures to establish project additionality and arrive at an appropriate and

conservative baseline scenario. APCL has excluded options that

Ø do not comply with legal requirements and/or

Ø encounter barriers related to availability of key resources such as fuels, materials,

technology, or other circumstances that could not be overcome.

There are five plausible options available with project proponent to meet the power

requirement equivalent to 7.5 MW.

Project Option 1 – Present Grid Mix

In this scenario the end user would get electricity from the current grid mix which consists of

a mix of thermal (coal and gas), hydro, nuclear and other renewable energy based power

plants and an equivalent amount of carbon dioxide would be generated at the thermal power

generation end.

Project Option 2 - 7.5 MW fossil fuel (coal) based power plant, supplying power to the

present grid mix.

In this scenario the end user would get power from the grid mix consisting of the project

option 2 along with the present generation mix. With an increased thermal capacity addition

of 7.5MW coal based power plant, there would be an increase in the amount of carbon

dioxide generated at the thermal power plants for equivalent electricity. Such small capacity

coal based independent power plants to supply electricity to the grid are not a common

practice due to the techno-economic circumstances that cannot be overcome. There is no

small size coal based power plant supplying power to the grid, the minimum capacity of the

coal-based power plant, which supplies electricity to the state grid is 195 MW4. Therefore,

project option – 2 is not an option available with APCL as developer of small size

independent power project and hence excluded.

Project Option 3 - 7.5 MW fossil fuel (gas) based power plant, supplying power to the

present grid mix.

In this scenario the end user would get power from the grid mix consisting of the project

option 3 along with the present generation mix. With an increased thermal capacity addition

of 7.5MW gas based power plant, there would be an increase in the amount of carbon dioxide

generated at the thermal (gas) power plants for equivalent electricity. The gas based power

plants are possible only if the gas is available as fuel. Due to its locational disadvantage gas as

fuel for power generation to the plant is not available. Thence, this project option 3 is not

available with APCL - an independent power producer from Rajasthan and may be excluded.

Project Option 4 - 7.5 MW fossil fuel (diesel) based power plant, supplying power to the

present grid mix.

4 http://rajenergy.com/

In this scenario the end user would get power from the grid mix consisting of the project

option 4 along with the present generation mix. With an increased thermal capacity addition

of 7.5MW diesel based power plant, there would be an increase in the amount of carbon

dioxide generated at the thermal power plants for equivalent electricity. However, this project

option would not be an appropriate baseline due its techno-economic circumstances that

cannot be overcome. The operating costs of the project option are significant and with the

diesel oil prices on an increasing trend the option is not economically viable. This is further

complemented by the fact that this option is not a common practice. There is no diesel based

power plant supplying power to grid5. Therefore we may conclude that this is not a project

option available with APCL - an independent power producer and may be excluded.

Project Option 5 – Project scenario supplying power to the present grid mix.

In this scenario the end user would get power from the grid mix consisting of the project

option 5 along with the present generation mix. In the project scenario the CO2 released

during the biomass combustion will be consumed by the plant species for their growth. In

view of the above, biomass combustion, biomass growth and its associated CO2 emissions

and consumption can be treated as cyclic process resulting in no net increase of CO2 in the

atmosphere. Therefore, biomass based power generation is considered as carbon neutral.

Mustard crop residue is the available biomass in the region. With an increased renewable

energy capacity addition of 7.5MW mustard crop residue based power plant, there would be a

reduction in the amount of carbon dioxide generated for equivalent electricity.

From the above assessment we may conclude that APCL has only two project options

available

Project Option 1 – Present Grid Mix

Project Option 5 – Project scenario supplying power to the present grid mix.

Barrier analysis

[Referring to Attachment A to Appendix B document of “Indicative simplified baseline and

monitoring methodologies for selected small scale CDM project activity categories”, project

participants are required to provide a qualitative explanation to show that the project activity

would not have occurred anyway, at least one of the listed elements should be identified in

concrete terms to show that the activity is either beyond the regulatory and policy requirement

or improves compliance to the requirement by removing barrier(s) ; The guidance provided

herein has been used to establish project additionality.]

5 http://rajenergy.com/

The APCL was aware of the various barriers which prevent a wide spread implementation of

the type of project. The barriers are detailed below. APCL proposes to overcome these

barriers with the availability of carbon financing against a sale consideration of carbon

credits. APCL took this CDM revenue stream into consideration before taking the initial steps

to project planning.

Investment barrier

In order to implement the project, the project proponent was required to

a) Develop an adequate infrastructure for the Fuel Collection System

The project proponent has to develop an infrastructure in terms of manpower and financial

resources, in order to ensure continuous fuel availability. This is a daunting task for the

project proponent since one single supplier cannot supply the quantity of fuel required for the

power plant. Negotiations will have to be done with atleast 30-40 suppliers/farmers for

providing sufficient quantity of MCR. Six –seven collection centers will be opened in the

interiors and 30-40 tractors will be taken to lease to transport the biomass to the project

activity site. This demands a rich experience in the rural economics. But this has its inherent

advantages, since it will be a source of income to the local rural population and will

contribute to sustainable development. The project proponent also plans to develop a

briquetting unit to form the briquettes using MCR, which makes the handling of fuel easy and

enhances the combustion potential. Carbon financing will help project proponent develop a

robust Fuel Collection System.

b) Secure Financial Closure

High upfront cost, lack of easy and long-term financing, project cash flows etc. are the

investment barriers to the high efficiency renewable energy projects. Due to restrictions like

institutional barriers and low penetration in the region, the accumulation of sufficient funds to

finance a high investment and capital-intensive project, such as the proposed CDM renewable

energy project is a quite difficult proposition.

Financial closure for the project activity is yet to be achieved. In APCL project too the

restrictions like high upfront cost, technological issues to project implementation, institutional

aspects related to project cash flows and no prior experience in power generation with MCR

as primary fuel and in selling power to the grid or other users are some of the reasons for this

delay in financial closure. This is APCL’s first venture into the business of power generation.

These restrictions to project implementation have been detailed below in point [B] and [C].

Carbon financing over the crediting periods (7 x 3 upto 21 years) as one of the cash in flows

of the project will add more credibility to APCL’s loan repayment capability thereby helping

them secure private financing to implement the proposed power project. APCL is conducting

discussions with some banks/financial institutions for project financing. APCL anticipates

better loan repayment terms from the banks/financial institutions in view of proposed carbon

financing. APCL, proposes to shoulder the significant market or financial risk and taking a

pro-active approach by showing confidence in the Kyoto Protocol/CDM system. Without the

proposed carbon revenues securing private financing will be difficult. Besides the direct

financing risk, APCL is shouldering the additional transaction costs such as preparing

documents, supporting CDM initiatives and developing and maintaining M&V protocol to

fulfil CDM requirements.

Technological barrier

Use of MCR for power generation is not a time-tested business proposition. The project

proposes to use modern energy efficient technology with high pressure and temperature

configuration. Major equipments of power plants are boiler and Steam Turbine and Generator

(STG) set. The power plant will have one condensing steam turbo generator unit with a

matching boiler of travelling grate type design capable of firing multi-fuel with MCR as the

primary fuel. The boiler is sized to produce a maximum of 38 TPH of steam. The steam

turbine will be a multistage, extraction cum condensing type machine. The steam conditions

at the boiler heat outlet are a pressure of 66 kg/cm2 and temperature of 485 + 50C.

There are certain known risks associated with the project implementation. There are

uncertainties related to achieving higher steam temperature and pressure parameters by using

MCR as primary fuel because it has tendency of sticking to the boiler tube surface. The

project proponent plans to bring in the expertise of people in the field of power generation to

further develop the technology for effective utilisation of MCR as fuel in boilers. The plant

would initially be operated at lower boiler outlet steam parameters (44kg/cm2 and 445oC).

After initial stabilisation and overcoming operational problems of firing MCR at lower steam

parameters the APCL will put efforts to achieve higher steam parameters (66kg/cm2 and

485oC) for which the boiler is designed. The perceived technological risks associated with

MCR utilization as primary fuel are too high for APCL to take the initiative of proposing to

implement the project and to attract investment without ensured revenue from sale of carbon

credits of the project.

Barrier due to prevailing practice

The project proponent conducted a comprehensive analysis on the common practices adopted

in Rajasthan for power generation in order to substantiate that the project is not a part of the

baseline and the most appropriate baseline, in absence of project would be the grid mix of

RVPN.

The state generation mix comprises of:

ü 77.65 % thermal power plants;

ü 9.47 % nuclear plant

ü 12.61 % hydro projects; and

ü 0.27 % wind and cogeneration projects

In thermal power plant category, coal based plants contribute for 69.82 % and balance 7.82 %

is contributed by the gas based power plants.

There has been an increase of 1479 MW during last four and half years in the installed

capacity in state of Rajasthan. The Govt. of Rajasthan had brought out a policy for promotion

of Generation of power from Non-Conventional Sources on 11.3.99. Some agreements for

implementation of biomass, waste fuel and Mustard Husk based power plants totalling 113

MW capacity additions have been executed. However till date a total of 7 MW6 capacity has

been commissioned. Hence renewable energy projects just comprise of 0.47 % of the total

addition in last four and a half years.

This illustrates the low penetration of such renewable energy projects and little willingness of

entrepreneurs to change the current operating practices in the region. We may conclude from

the above statistics that the proposed project under discussion is not a common practice in the

region. In India, till date, only one plant based on MCR as primary fuel, has been

commissioned i.e. Kalpataru Power Transmission Limited, commissioned in October 2003.

The practice of generating power by using MCR as primary fuel has not penetrated in the

region due certain prohibitive barriers to project implementation. The comprehensive analysis

on the common practices adopted for power generation in Rajasthan further justifies that the

project is not a part of the baseline. This project will be the second project of this type to be

commissioned once all the barriers associated to project implementation are overcome. The

data on the state of MCR based power projects, suggests that the barriers, which are discussed

below have hindered the growth of the sector.

Though the project is not a common practice, the project proponent was keen to take up this

new initiative of utilizing MCR (waste material) as primary fuel by overcoming the barriers to

prevailing practises and set examples for other entrepreneurs to follow. Some of the driving

forces to this ‘Climate change initiative’ were 6 http://www.rajenergy.com/

- rural development of the region by creating a new demand for the waste biomass

thereby carving a source of additional revenue for the farmers involved in sourcing

the raw material and

- GHG reduction

- demonstrating to other entrepreneurs the un-tapped potential of generating clean

power from combustion of MCR

Although Government of Rajasthan had brought out a policy for promotion of generation of

power from Non-Conventional Sources, but APCL is not legally bound to invest in the high

efficiency biomass based power plant. Also there are no planned regulations that will coerce

the Independent Power Producers (IPP) to implement the project activity within the crediting

period. The implementation of the MCR based project activity is a voluntary step undertaken

by APCL with no direct or indirect mandate by law.

Institutional barriers

In Rajasthan, a serious deterrent to the private sector participation in the non-conventional

power generation is the lack of adequate infrastructure. A realistic policy and regulatory

network, a good transmission network and conventional sources of funding are the

fundamental necessities to promote such projects. The first non-conventional power policy in

the State was introduced in 1999 for a periods of five (5) years. The entrepreneurs are not

keen to take the project related risks, in absence of very supportive renewable energy policies.

The transmission lines in the state are aging and require huge investment for replacement /

repairs. The lack of adequate financial resources is likely to continue due to the prevailing

practice barrier. A sustained effort in this direction is required to overcome these institutional

barriers.

Further this is APCL’s first venture into the business of power generation. They have to

understand and deal with the economics of electricity generation, distribution and dealing

with power sector economics, bureaucracy etc.

APCL has signed a Power Purchase Agreement (PPA) with RVPN. For their cash in flows the

project depends on the payments from RVPN against the sale of electricity to the grid.

Electricity boards in India are not very financially healthy. Total outstanding dues against

Rajasthan payable to CPSUs as on 31st March 2003 were 480.75 crores7. It’s likely that there

could be problems with the cash inflows of project. APCL was well aware of the situation but

with the proposed carbon financing as one of the revenue streams, the management has

7 http://powermin.nic.in/indian_electricity_scenario/pdf/NR1104.pdf

decided to take this risk and face this institutional barrier on which they have limited or no

control.

In view of the above analysis it is understood that the Project Option 5 – Project scenario

supplying power to the present grid mix has its associated barriers to implementation. In spite

of these limitations, APCL is one such entrepreneur to have proposed to overcome these

barriers by initiating this GHG abatement project under Clean Development Mechanism. If

APCL is successful in overcoming the above-identified barriers, it will encourage other

entrepreneurs to come up with similar project activities. We may also conclude that the

project activity is additional.

The Project Option 1 – Present Grid mix does-not face any of the above-mentioned barriers

and is the status quo situation. In absence of project implementation this scenario would

continue. Hence, the ‘Option 1- Present Generation Mix, is the most likely baseline scenario

and has been considered for the baseline emission calculations.

With the implementation of the project, 301.3 million kWh of electricity would be exported to

the RVPN grid over the first 7 years crediting period and reduce the combined margin carbon

intensity of the grid.

B.4 Description of the project boundary for the project activity:

As per the guidelines mentioned in Type I.D. of Annex-B of the simplified modalities and

procedures for small-scale CDM project activities, project boundary encompasses the

physical and geographical site of the renewable generation source.

For the proposed project activity the project boundary is from the point of fuel storage to the

point of power supply to nearest HT line where the project proponent has a full control. Thus,

boundary covers fuel storage, boiler, steam turbine generator and all other accessory

equipments. However, for the purpose of calculation of baseline emissions, Rajasthan state

electricity grid is also included in the project boundary.

Thus, boundary covers fuel storage and processing, boiler, STG and electricity grid as shown

in the diagram on the next page.

B.5 Details of the baseline and its development:

B.5.1 Specify the baseline for the project activity using a methodology specified in the applicable project category for small-scale CDM project activities contained in appendix-B of the simplified M&P for small-scale CDM project activities:

Since the project activity is feeding power to RVPN grid, the baseline for this project activity

is the function of the generation mix of Rajasthan state grid. Using the methodology available

for small-scale project activities, the average of operating and build margin (in

kgCO2equ/kWh) of current generation mix of Rajasthan is used for the calculation of

baseline. Actual CO2 emission factors are used for the purpose. The project baseline would be

revisited every 7 years to ensure that the assumptions made, still hold true or they would be

revised accordingly.

B.5.2 Date of completing the final draft of this baseline section (DD/MM/YYYY):

15/02/2004

B.5.3 Name of person/entity determining the baseline:

APCL and their consultants

Biomassstorage

Biomass firedBoiler

Power Generation

Unit

EmissionGenerated

Emissionsequestered

Electricity toRajasthan

grid

End Users

Project Boundry

Biom

ass

BiomassSource

Auxilliaryconsumption

C. Duration of the project activity and crediting period

C.1 Duration of the project activity:

C.1.1 Starting date of the project activity:

November 2004

C.1.2 Expected operational lifetime of the project activity:

25 years

C.2 Choice of the crediting period and related information:

C.2.1 Renewable crediting period C.2.1.1 Starting date of the first crediting period (DD/MM/YYYY):

September 2005

C.2.1.2 Length of the first crediting period

7 years

C.2.2 Fixed crediting period (at most ten (10) years): C.2.2.1 Starting date (DD/MM/YYYY):

C.2.2.2 Length (max 10 years):

D. Monitoring methodology and plan

D.1 Name and reference of approved methodology applied to the project activity:

Title: Monitoring Methodology for the category I D – Renewable electricity generation for a

grid

Reference: ‘Paragraph 31 ’ as provided in Appendix B of the simplified modalities and

procedures for small-scale CDM project activities - Indicative Simplified Baseline And

Monitoring Methodologies For Selected Small-Scale CDM Project Activity Categories.

The document requires the project-monitoring plan to consist of metering the electricity

generated by the renewable technology.

D.2 Justification of the choice of the methodology and why it is applicable to the project activity:

As per the provisions of paragraph 12 of Simplified Modalities and Procedures for Small

Scale CDM Project Activities [FCCC/CP/2002/7/Add.3, English, Page 21] the “Project

participants may use the simplified baseline and monitoring methodologies specified in

appendix B for their project category” if they meet the applicability criteria of Small scale

CDM project activity. Since the project activity is a small-scale CDM project of Type I.D

category, the monitoring methodology and plan has been developed in line with the guidance

provided in paragraph 31 of Appendix B.

Generation of power using mustard crop residue, as fuel will lead to mitigation of GHG in the

fossil fuel based plants, which supply power to RVPN. In order to monitor the mitigation of

GHG due to generation of power at APCL, it is required that the total power produced and

auxiliary power consumed is measured.

Description of monitoring plan

The Monitoring and Verification (M&V) procedures define a project-specific standard against

which the project's performance (i.e. GHG reductions) and conformance with all relevant

criteria will be monitored and verified. The aim is to enable this project have a clear, credible,

and accurate set of monitoring, evaluation and verification procedures. The purpose of these

procedures would be to direct and support continuous monitoring of project performance/key

project indicators to determine project outcomes, greenhouse gas (GHG) emission reductions.

GHG SOURCES

Direct On-Site Emissions

Direct on-site emissions after implementation of the project arise from the burning of biomass

in the boiler. These emissions mainly include CO2. Since the biomass is formed by fixing the

atmospheric CO2 by the action of photosynthesis in the presence of sunlight, the CO2 released

due to combustion of biomass is assumed to be equal to the CO2 fixed by the photosynthesis.

The CO2 released during the combustion will be consumed by the plant species for their

growth. In view of the above, biomass combustion and growth of biomass and associated CO2

consumption and release can be treated as cyclic process resulting in no net increase of CO2 in

the atmosphere. Hence, the project will not lead to GHG emissions.

Direct Off-Site Emissions

In the proposed project scenario the direct off-site emissions arise from the biomass transport.

The collection of MCR will be done through the farmers. They bring the biomass to these fuel

processing centers in their own vehicles. Although some farmers also have tractors, the major

means of transporting MCR is the camel cart. But 30% of total biomass transportation by

tractor trolley has been considered.

However in the baseline scenario CO2 emissions will occur during the transportation of coal

from the mines to respective coal based power plants. The distance between the coal mines

and the power plants is higher as compared to the transportation distance between biomass

collection centers to biomass power project site and hence the higher CO2 emissions. To be on

conservative side, this leakage due to coal transportation has not been added while calculating

the baseline of RVPN grid and hence a small leakage due to transportation of biomass has

been neglected from the calculations.

Indirect On-Site Emissions

The indirect on site GHG source is the consumption of energy and the emission of GHGs

involved in the construction of Biomass based power plant.

Considering the life of the power plant and the emissions to be avoided in the life span of 15 –

20 years, emissions from the above-mentioned source is too small and hence neglected.

No other indirect on-site emissions are anticipated from the project activity.

Indirect Off-Site Emissions

The indirect off-site emissions would include GHG emissions resulting from the process

construction and erection of the HT lines from the point of generation to the nearest HT lines.

Considering the life of the power plant and the emissions to be avoided in the life span of 15–

20 years, emissions from this source is also too small and hence neglected.

Key Project Parameters affecting Emission Reductions

Total Power generated by the project: The total power generated by the power project will

be measured to the best accuracy and will be recorded, monitored on a continuous basis. The

parameter will substantiate the smooth operations of the power plant.

Auxiliary consumption: The power consumed by plant auxiliaries will also be recorded to

the best accuracy. This will be recorded monitored on a continuous basis. The total quantum

of power consumed by the auxiliaries would affect the net power exported to the grid and

therefore the amount of GHG reductions. Therefore any increase in the consumption pattern

of the auxiliary system would be attended to.

Net Power exported to the grid: The project revenue is based on the net units exported as

measured by main metering system and/or backup metering system. The monitoring and

verification system would mainly comprise of these meters as far as power export is

concerned. RVPN will be billed by APCL based on joint meter reading promptly following

the end of each month for energy supplied.

The general monitoring principles are based on:

Ø Frequency

Ø Reliability

Ø Registration and reporting

Since the emission reduction from the project are determined by the net units exported to the

grid (and then multiplying with appropriate emission factor) it becomes important for the

project to monitor the net export of power to the grid on real time basis.

Frequency of monitoring: APCL will carry out the hourly data recording. The RVPN and

APCL shall jointly read the main and backup metering system on the first day of every

month.

Reliability: The amount of emission reduction is proportional to the net energy generation

from the project. Thus the final kWh meter reading is the final value from project side. The

reliability of the monitoring system is governed by the accuracy of the measurement system

and the quality of the equipment to produce the result.

The project proponent would ensure accuracy of the measurement system as follows:

- The shift incharge will be responsible for the hourly data recording and the plant manager

will ensure that that the data is properly archived.

- The plant manager will be a qualified engineer with 10-15 year experience in power

industry. All the shift incharges will be diploma holders and will undergo an exhaustive

training programme, including plant operations, data monitoring, report generation etc.

The project proponent would also ensure quality of the equipment used for monitoring.

The RVPN shall own, test and maintain the main metering system. The backup metering

system shall be installed, tested, owned and maintained by APCL. The main and backup

metering system shall be sealed in the presence of both parties.

Meters shall be calibrated on annual basis so that the accuracy of measurement can be

ensured. When the main metering system and/or backup metering system and/or any

component is found to be outside the acceptable limits of accuracy or otherwise not

functioning properly, it shall be repaired, re-calibrated or replaced by APCL and/or RVPN, as

soon as possible. Any meter seal shall be broken only by RVPN’s representative in the

presence of APCL’s representative whenever the main or backup metering system is to be

inspected, tested, adjusted, repaired or replaced.

Registration and reporting: The RVPN and APCL shall jointly read the metering system

and shall keep the complete and accurate records for proper administration.

Hourly data recording by the shift incharge will be there. Daily, weekly and monthly reports

stating the generation are prepared by the shift incharge and verified by the plant manager .

In addition to the records maintained by APCL, RVPN also monitors the actual power

exported to the grid and certify the same.

Other Parameter to be monitored

Quantity and Quality of the biomass used in the boiler as fuel

The biomass received from the dealers will be stored in the plants storage area specially

designed for such storage. From the storage area the biomass will be transferred to the

intermediate bunkers by bucket elevator/belt conveyor.

Belt conveyors transfer the biomass from the bunkers to the feeding hopper of the boiler, from

where biomass is fed into the boiler. An online weighing system has to be provided to the belt

conveyors to measure, record and transmit, the actual quantity of the fuel entering into the

boiler for online monitoring in the DCS. The weighing system needs to be calibrated regularly

to ensure the accuracy of the measurement. The data will be recorded for further verification.

The amount of biomass purchased, will be based on invoices / receipts from fuel contractors.

The main type of fuel proposed for the power generation is only biomass like mustard crop

residue. The properties of the biomass from ultimate analysis, calorific value, ash composition

etc. will be consistent in the region. However, it is proposed to monitor various properties of

biomass used as fuel, by taking samples at random, so that in case of any drastic change in the

properties, corrective actions can be taken. The measurement of fuel properties like calorific

value will be conducted as per standard national/international practices and data or documents

will be kept open for verifiers.

Quantity and Quality of coal (if any) used in the boiler

Though the project proponent proposes to use 100% biomass for power generation the project

proponent will provide for

- a proper online coal weighing system in order measure the quantity of coal used

- necessary provisions to measure carbon content of the coal samples

to arrive at project emissions from coal combustion if any.

Verification

The performance of the project leads to CO2 emission reductions. In other words, the higher

the electricity exports to the grid the more would be the emission reductions.

There are two aspects of Verification

[A] Verification of the Monitoring System which includes

Ø Verification of various measurement and monitoring methods

Ø Verification of instrument calibration methods

Ø Verification of measurement accuracy

[B] Verification of Data collected which includes

• Total generation of power and auxiliary power requirements.

• Quantity and quality of the Biomass

• Coal consumption (if any)

The project proponent will provide the necessary supportive documents to enable verification

of both the monitoring system and the data archived as per Section D3.

D.3 Data to be monitored:

a) Parameters affecting the emission reduction potential of the project activity

ID Number

Data type Data variable Data unit

Measured (m), calculated (c) or estimated

(e)

Recording frequency

Proportion of data to

be monitored

How will the data be archived?

(electronic/paper)

For how long is

archived data to be

kept?

Comment

1 Power Electricity generated

KWh M Continuous Total Electronic 3 years after issue of CERs

2 Power Auxiliary consumption

KWh M Continuous Total Electronic 3 years after issue of CERs

3 Power Net Electricity Exported

KWh M Continuous Total Electronic 3 years after issue of CERs

b) Fuel related parameters

ID Number

Data type Data variable

Data unit

Measured (m),

calculated (c) or estimated

(e)

Recording frequency

Proportion of data to

be monitored

How will the data be archived?

(electronic/paper)

For how long is

archived data to be

kept?

Comment

1 Fuel Biomass Quantity

MT m hourly >95%* paper 3 years after issue of CERs

2 Fuel Biomass – Calorific Value

Kcal/Kg Actual sample testing

fortnightly paper 3 years after issue of CERs

Through sample testing

3 Fuel Coal Quantity

MT m Daily >95%* paper 3 years after issue of CERs

4 Fuel Carbon content in coal

% Actual sample testing

For each batch of

coal

Grab Sample

paper 3 years after issue of CERs

Through sample testing

D.4 Name of person/entity determining the monitoring methodology:

Alwar Power Corporation Ltd.

The person/entity is also a project participant as listed in Annex 1 of this document.

E. Calculation of GHG emissions by sources

E.1 Formulae used:

E.1.1 Selected formulae as provided in Appendix B:

Not applicable.

E.1.2 Description of formulae when not provided in Appendix B: E.1.2.1 Describe the formulae used to estimate anthropogenic emissions by sources of GHGs due to the project activity within the project boundary: (for each gas, source, formulae/algorithm, emissions in units of CO2 equivalent)

The project proponent in case of exigencies proposes to use coal as fuel instead of biomass.

The CO2 emissions during the usage of coal has been calculated in the following manner:

CO2 Emission [in kgs]= Stoichiometric CO2 from carbon content of coal [based on total

carbon content ]

To have an estimate of the project CO2 emission quantity due to combustion of coal along

with the biomass, total carbon content of the coal should be known. Combustion reaction for

CO2 emission is as under.

C + O2 = CO2

Assuming complete combustion of coal, following formula can be used for conservative

estimation of CO2 emissions.

QCCEc **)12/44(=

where,

CEc - Stoichiometric carbon-dioxide emission due to coal burning at project, MT

C - Carbon percentage in coal, %

Q - Quantity of coal burned, MT

Although calculation for project emissions have been incorporated in Chapter E,

carbondioxide emissions from coal combustion are considered as zero since the APCL does

not propose to use coal as fuel for power generation. APCL proposes to use 100% biomass

since there is surplus crop residue after discounting for various end-uses, available within a

radius of 25 km which is estimated to be 1,11,800 MT/annum and within 50 km radius more

than 4,97,234 MT/annum. There is a potential of generating renewable energy to a tune of

around 45 MW from this resource.

E.1.2.2 Describe the formulae used to estimate leakage due to the project activity, where required, for the applicable project category in Appendix B of the simplified modalities and procedures for small-scale CDM project activities (for each gas, source, formulae/algorithm, emissions in units of CO2 equivalent)

The leakage activity identified, which contributes for GHG emissions outside the project

boundary is transportation of biomass (MCR) from biomass collection centers to biomass

power project site. The collection of MCR will be done through the farmers. They bring the

biomass to these fuel processing centers in their own vehicles. Although some farmers also

have tractors, the major means of transporting MCR is the camel cart. Rajasthan is a poor

State, with fragmented land holdings. Also, there are no tracks through the fields that can be

used to transport the MCR to these centers. Therefore, camel cart is the most successful

means of transporting the MCR to the collection centers. On an average, a camel cart can

carry between 1.0-1.5 tons of MCR depending on the type of trolley used. Calculation of

leakage has been carried-out as under: [For details refer to Enclosure B-Leakage Calculations]

§ Biomass to be procured - 60,000 MT

(Based on the assumption, 70% of total biomass transportation by camel cart & 30%

by tractor trolley)

§ Average Distance between project - 25 km

site and biomass collection centers

§ Biomass load per tractor trolley - 1.5 MT

§ Number of trips - 12000

§ Consumption of Diesel per trip - 10 litres (5 km/litre)

§ Total Diesel consumption - 1,20,000 litres/annum

§ CO2 emission factor for Diesel - 74.10 tons CO2/ TJ

(as per IPCC guidelines)

§ CO2 emission per annum - 252 tons

The CO2 emission (leakage) occurs during the transportation of coal from the mines to

respective coal based power plants. Since state of Rajasthan gets coal from other states, the

distance between the coal mines and the power plants is higher as compared to the

transportation distance between biomass collection centers to biomass power project site and

hence the higher CO2 emissions. To be on conservative side, this leakage due to coal

transportation has not been added while calculating the baseline of RVPN grid and hence a

small leakage due to transportation of biomass has been neglected from the calculations.

E.1.2.3 The sum of E.1.2.1 and E.1.2.2 represents the project activity emissions:

The emissions from the project using coal as supplementary fuel would give the project

activity emissions.

E.1.2.4 Describe the formulae used to estimate the anthropogenic emissions by sources of GHG’s in the baseline using the baseline methodology for the applicable project category in Appendix-B of the simplified modalities and procedures for small-scale CDM project activities

Rajasthan grid has been considered as the system boundary for the baseline emission

calculations. Rajasthan’s present generation mix, sector wise installed capacities and emission

co-efficients are used to arrive at the net carbon intensity/baseline factor of the chosen grid.

As per the provisions of the methodology the emission coefficient for the electricity displaced

would be calculated in accordance with provisions of paragraph 29 of Appendix B of

Simplified Modalities and Procedures for Small Scale CDM Project Activities for grid

systems.

The emission coefficient has been calculated in a transparent and conservative manner as:

The average of the “approximate operating margin” and the “build margin”

(i) The “approximate operating margin (OM)” is the weighted average emissions of all

generating sources serving the system, excluding hydro, geothermal, wind, low-cost biomass,

nuclear and solar generation

(ii) The “build margin (BM)” is the weighted average emissions (in kg CO2equ/kWh) of

recent capacity additions to the system

The step-by-step calculation is as follows:

Step 1 : Net emission factor for coal = Actual emission factor for coal x % of

generation by coal out of total

generation (Excluding nuclear, hydro

and renewable energy projects)

Step 2 : Net emission factor for gas = Step 1 is to be repeated for gas.

Step 3 : Thermal efficiency of coal

based power plant

= 35.26%

Step 4 : Thermal efficiency of gas

based power plant

50%

Step 5 : Net operating margin (OM) = (Net emission factor for coal/Thermal

factor efficiency of coal) + (Net emission

factor for gas/Thermal efficiency of

gas)

Step 6 : Net built margin (BM) factor = 0.7

Step 7 : Net carbon emission factor = (Net operating margin factor + Net built

margin factor)/2

Step 8 : Units exported to RVPN = Total Energy generation –Total

auxiliary consumption.

Step 9 : Baseline emission = Net carbon emission factor x Units

exported to RVPN

Since there is a gap between demand and supply in Rajasthan grid, the export of power from

the project activity to Rajasthan grid will replace or get absorbed to partially fulfill the

Rajasthan power requirement.

If the same amount of electricity is generated by the coal and gas based power projects,

supplying electricity to the grid it adds to the emissions that are getting reduced by the project

activity. Hence, the baseline calculated using above methods / scenarios would represent the

realistic anthropogenic emissions by sources that would occur in absence of the project

activity. No transmission and distribution losses have been considered since project will

export power at high voltage of 132 kV. Combined margin factor that incorporates ‘built

margin’, takes into consideration the uncertainties expected in the baseline scenario.

E.1.2.5 Difference between E.1.2.4 and E.1.2.3 represents the emission reductions due to the project activity during a given period:

Following formula is used to determine Emission reduction

CO2 emission reduction due to project activity

= Net CO2 baseline emission

– Project emission

X Electricity exported to grid (in kWh)

E.2 Table providing values obtained when applying formulae above:

Using UNFCCC baseline methodology for small-scale CDM project, emission reductions by

project activity for first 7 year crediting period has been calculated and tabulated as under.

Emission Reductions

Sr. No.

Operating Years

Net Baseline Emission Factor

(Kg of CO2 / kWh)

Baseline Emissions (Tones of

CO2)

Project Emissions (Tones of

CO2)

Emission Reductions, ERs (Tones of CO2)

1. 2005-2006 0.92 35328.00 0 35328.00

2. 2006-2007 0.92 38088.00 0 38088.00

3. 2007-2008 0.92 40756.00 0 40756.00

4. 2008-2009 0.92 40756.00 0 40756.00

5. 2009-2010 0.92 40756.00 0 40756.00

6. 2010-2011 0.92 40756.00 0 40756.00

7. 2011-2012 0.92 40756.00 0 40756.00

Total ERs 277196.00 0 277196.00

Therefore an conventional energy equivalent of 301.3 Million kWh for the first crediting

period of 7 years in Rajasthan would be saved by exporting power from the 7.5 MW Biomass

based power plant which in turn will reduce 277,196 tonnes of CO2 emissions considering

baseline calculations.

The methodology adopted to calculate the baseline is given in detail in Annex-3.

F. Environmental impacts

F.1 If required by the host Party, documentation on the analysis of the environmental impacts of the project activity

The project does not fall under the purview of the Environmental Impact Assessment (EIA)

notification of the Ministry of Environment and Forest, Government of India. Hence, not

required by the host party. However, Rajasthan State Pollution Control Board (RSPCB) has

prescribed standards of environmental compliance and monitors the adherence to the

standards. RSPCB have issued Consent To Establish (CTE also termed as NOC) to APCL

under the provisions of Water (Prevention and Control of Pollution) Act, 1974 / Air

(Prevention and Control of Pollution) Act, 1981, Environment Protection Act, 1986 with

following terms and conditions.

1) The treated trade effluent shall confirm to the limits of the general standards

prescribed under the provisions of EP act 1986 for discharge of effluent into inland

surface water. The overall quantity shall not exceed 60 kl/day from the premises.

2) Quantity of domestic waste water shall not exceed 8 kl/day.

3) Air emissions shall confirm to Emission Regulations issued by the Central Pollution

Control Board and as adopted by the State Pollution Control Board.

4) The infrastructure facility for monitoring of stack emissions on each stack and flow

measuring devices at each unit of effluent treatment plant shall be provided.

G. Stakeholders comments

G.1 Brief description of the process by which comments by local stakeholders have been invited and compiled:

The 7.5 MW non-conventional renewable energy source biomass (MCR) power plant is

implemented by Alwar Power Company (P) Limted. The project will use biomass that is

abundantly available.

The various stakeholders identified for the project are as under.

1. Elected body of representatives administering the local area (village Panchayat)

2. Rajasthan Rajya Vidyut Prasaran Nigam Ltd (RVPN)

3. Rajasthan State Pollution Control Board (RSPCB)

4. Ministry of Environment & Forest (MoEF), Government of India

5. Consultants

6. Equipment Suppliers

Stakeholders list includes the government and non-government parties, which are involved in

the project at various stages. At the appropriate stage of the project development,

stakeholders/ relevant bodies were involved to get the project clearance

G.2 Summary of the comments received:

Stakeholder’s involvement

The village Panchayat /local elected body of representatives administering the local area is a

true representative of the local population in a democracy like India. Hence, their consent /

permission to set up the project is necessary. APCL has already completed the necessary

consultation and documented their approval for the project.

Local population comprises of the local people in and around the project area. The roles of the

local people are as a beneficiary of the project. The local population will be involved in the

supply of the biomass and hence the project would be a beneficial project for the local

population. In addition to this, the project would also lead to local manpower working at the

plant site. Since, the project will provide good direct and indirect employment opportunities

the local populace is encouraging the project.

The project does not require displacement of any local population. In addition, the local

population is also an indirect consumer of the power that is supplied from the power plants.

This is essential because the power sold to the grid is expected to improve the stability in the

local electricity network. Since, the distance between the electrical substation for power

evacuation and the plant is rather small, installation of transmission lines will not create any

inconvenience to the local population.

Thus, the project will not cause any adverse social impacts on local population. Rather, it will

help in improvising their quality of life.

Rajasthan State Pollution Control Board (RSPCB) has prescribed standards of environmental

compliance and monitors the adherence to the standards. The project has already received

Consent to Establish from RSPCB to start commissioning of the plant.

Rajasthan Renewable Energy Corporation Limited (RREC) implements policies in respect of

non-conventional renewable power projects in the state of Rajasthan and has accorded

approval to the project.

As a buyer of the power, the RVPN is a major stakeholder in the project. They hold the key to

the commercial success of the project. RVPN has already cleared the project and APCL has

already signed Power Purchase Agreement (PPA) with RVPN.

The government of India, through Ministry of Non-conventional Energy Sources (MNES),

has been promoting energy conservation, demand side management and viable renewable

energy projects including wind, small hydro and bagasse cogeneration / bio-mass power.

The stakeholder’s comments are summarized in the table given below:

S.No Stakeholder Comments Remarks

1. Village Panchayat Refer the attached

comments.

The local population will be

involved in the supply of the

biomass and the project will provide

good direct and indirect employment

opportunities hence, the local

populace is encouraging the project.

2. Rajasthan Rajya

Vidyut Prasaran

Nigam Ltd

No comments PPA has been signed with RVPN.

The initial term of agreement shall

be 20 years from commercial

operation date. (PPA can be shared

with the validator on site visit)

3. Rajasthan State Ø Treated trade Ø Electrostatic precipitator (ESP)

S.No Stakeholder Comments Remarks

Pollution Control

Board

effluent shall conform

to limits of EPA, 1986

for discharge into

inland surface water.

Ø Domestic waste

water shall be treated

as per IS:2470 and

treated effluent should

conform to standards

as prescribed by State

Board.

Ø The air emission

shall conform to

emission regulations

Part-I, II & IV issued

by Central Board and

as adopted by State

Board.

will be installed at exit of boiler.

Ø There will be no discharge of

effluent from plant outside the

plant site

Ø Domestic waste will be conveyed

through separate drains to septic

tank before being discharged.

Consent to establish the proposed

power plant has been issued under

provisions of Water Act, 1974, Air

Act, 1981 and Environment

Protection Act (EPA), 1986.

4. Ministry of

Environment & Forest,

Government of India

No comments Copy of host country endorsement is

attached

5. Consultants No comments Project consultants are involved in

the project to take care of various pre

contract and post contract project

activities like preparation of Detailed

Project Report (DPR), preparation of

basic and detailed engineering

documents, preparation of tender

documents, selection of vendors /

suppliers, supervision of project

implementation, successful

commissioning and trial runs

6. Equipment Suppliers No comments Equipment suppliers will be

supplying the equipments as per the

specifications finalized for the

project and will be responsible for

successful erection &

commissioning of the same at the

S.No Stakeholder Comments Remarks

site and for performance.

G.3 Report on how due account was taken of any comments received:

The relevant comments and important clauses mentioned in the project documents like

Detailed Project Report (DPR), Biomass assessment study, environmental clearances, power

purchase agreement, local clearance, etc. were considered in the preparation of CDM project

development document. Further, the CDM-PDD will be posted on the UNFCCC or

validator’s web site for public viewing and comments.

Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: Alwar Power Company (P) Limited Street/P.O.Box: DLF Qutab Enclave, Phase-II Building: L1/22 City: Gurgaon State/Region: Haryana Postfix/ZIP: 122002 Country: India Telephone: 91 124 5103641/2 FAX: 91 124 5103640 E-Mail: bhavna@del2.vsnl.net.in URL: Represented by: Title: Dr. Salutation: -- Last Name: Bararia Middle Name: -- First Name: Ajai Department: Managing Director Mobile: 91 11 32678910 Direct FAX: 0124-2359039 Direct tel: Personal E-Mail:

Organization: Climate Change Cell,

Ministry of Environment & Forest, Government of India

Street/P.O.Box: Lodhi Road Building: Paryavaran Bhawan, CGO Complex City: New Delhi State/Region: New Delhi Postfix/ZIP: 110003 Country: India Telephone: 011-24362252 FAX: 011 24363577 E-Mail: rksethi@menf.delhi.nic.in URL: Represented by: Title: Mr. Salutation: -- Last Name: Sethi Middle Name: K. First Name: R. Department: Director (Climate Change) Mobile: - Direct FAX: - Direct tel: - Personal E-Mail: -

Organization: Austrian Federal Ministry of Agriculture, Forestry, Environment and

Water Management Street/P.O.Box: Stubenbastei 5, A-1011 Building: City: Vienna State/Region: Postfix/ZIP: Country: Austria Telephone: ++43 1 515 22-0 FAX: E-Mail: URL: http://www.lebensministerium.at Represented by: Title: Mr. Salutation: -- Last Name: Plöchl Middle Name: K. First Name: Clemens Department: Kommunalkredit Public Consulting GmbH8 (Austrian JI/CDM

Programme), Climate and Energy Mobile: - Direct FAX: +43 (0)1/31 6 31-104 Direct tel: +43 (0)1/31 6 31-244 Personal E-Mail: c.ploechl@kommunalkredit.at

8 The project is under active discussion with Austrian Federal Ministry of Agriculture, Forestry, Environment and Water Management, for which Kommunalkredit Public Consulting GmbH is programme manager.

Annex-2 Information Regarding Public Funding

No Public Funding is available to the project.

Annex-3 BASE LINE DATA

Carbon emission factor of grid

Rajasthan’s Power Generation, Present generation mix, sector wise installed capacities,

emission co-efficient and generation efficiencies are used to arrive at the net carbon

intensity/baseline factor of the chosen grid. As per the provisions of the proposed

methodology the emission coefficient for the electricity displaced would be calculated in

accordance with provisions of paragraph 29 of Appendix B of Draft Simplified Modalities

and Procedures for Small Scale CDM Project Activities [Reference: FCCC/CP/2002/7/Add.3,

English, Page 21] for grid systems.

The provisions of paragraphs 29 of Appendix B requires the emission coefficient (measured

in kg CO2equ/kWh) to be calculated in a transparent and conservative manner as:

(a) The average of the “approximate operating margin” and the “build margin” (or

combined margin)

OR

(b) The weighted average emissions (in kg CO2equ/kWh) of the current generation mix.

Complete analysis of the system boundary’s electricity generation has been carried out for the

calculation of the emission coefficient as per point 29 (a) given below with baseline emission

factor calculations.

Combined Margin

The baseline methodology suggests that the project activity will have an effect on both the

operating margin (i.e. the present power generation sources of the grid, weighted according to

the actual participation in the state grid mix) and the build margin (i.e. weighted average

emissions of recent capacity additions) of the selected Rajasthan grid and the baseline

emission factor would therefore incorporate an average of both these elements.

Operating Margin

As mentioned above the project activity will have some effect on the Operating Margin (OM)

of the Rajasthan State Grid. The carbon emission factor as per the Operating Margin takes

into consideration the present power generation mix of 2003-2004 excluding hydro,

geothermal, wind, low-cost biomass, nuclear and solar generation of the selected grid,

efficiency of thermal power plants and the default value of emission factors of the fuel used

for power generation.

The consumer of a state of Rajasthan gets a mix of power from the different sources. The

figures of installed power capacity, share of the state in the central pool, and actual plant

availability decides the content of power. The real mix of power in a particular year is

however based on actual units generated from various sources of power. The power system in

Rajasthan comprises of Rajsthan Rajya Vidyut Utpadan Nigam Ltd. – generating company,

Rajasthan Vidyut Prasaran Nigam Ltd – transmission company and three regional distribution

companies namely Jaipur Vidyut Vitran Nigam Ltd, Ajmer Vidyut Vitran Nigam Ltd and

Jodhpur Vitran Nigam Ltd. RVPNL is operating major thermal and hydel power stations in

Rajasthan. The state also gets share from the central sector generation plants and interstate

power projects. The data collected and used are presented in Tables A3.1 to A3.3

The most important parameter in estimating the emissions is the thermal efficiency of the

power plant. The net energy consumption norms were based on best efficiency for each of the

technologies considered. As per the CEA report, it is assumed that all the coal & lignite based

plants coming up in tenth & eleventh & plan will use pulverized coal sub-critical / super

critical pressure technology with the thermal efficiency of around 34%. The percentage of

carbon that is not burnt is very low and, hence, complete combustion was assumed. The

thermal efficiency of existing old power plants is less than 30% and for new modern power

plants it is expected to be around 34%. Central Electricity Authority has presented the

analysis of Station Heat Rates (SHR) for 43 thermal power plants using coal, in India, in the

report ‘Performance Review of Thermal Power Stations 2003-04 Section 13’9. As per this

report ‘Suratgarh thermal power plant’ (located in Rajasthan) has the second highest

efficiency of 35.26 % among all the coal based power plants in Northern grid. Lehra

Mohabbat, a plant located in Punjab has the highest efficiency of 35.51 %. But this plant does

not supply electricity to Rajasthan grid. Hence the efficiency of ‘Suratgarh thermal power

plant’ has been considered for the calculations. Average efficiency of gas based thermal

plants in Rajasthan as against the standard norms works out to be around 40-45% On

conservative basis average efficiency for base line calculations is considered as 50%.

Standard emission factors given in IPCC for coal and gas (thermal generation) are applied

over the expected generation mix and net emission factors are determined.

The formulae are presented in Section-E and the calculations are presented in an excel sheet

Enclosure A. Carbon Emission Factor of grid as per OM is 0.93 kg CO2/kWh electricity

generation.

9 http://cea.nic.in/opm/0304/sec-13_sush777.pdf

Build Margin

The project activity will have some effect on the Build Margin (BM) of the Rajasthan State

Grid. The baseline factor as per the Build Margin takes into consideration the delay effect on

the future projects and assumes that the past trend will continue in the future. As per the

baseline methodology, the baseline factor for Build Margin is calculated as the weighted

average emissions of recent capacity additions to the system, defined as the top of most recent

20% of plants built or the 5 most recent plants which ever is greater. Since some major

thermal plants have started operation in the year 2003 we have considered them during built

margin calculations. In case of Rajasthan grid the total number of plants supplying power to

grid is 25 hence, 20% of the most recent plants sum up to 5 power plants. For our built margin

calculation we would therefore take into consideration 5 most recent plants built in Rajasthan

given in Table-A.3.4. Carbon Emission Factor of grid as per BM is 0.9 kg CO2/kWh

electricity generation.

Net Carbon Emission FactorGrid for 2003-2004 as per CM = (OM + BM)/2 = 0.92 kg of

CO2 / kwh10 generation respectively. (Refer to Excel Sheet Enclosure A and C: Calculation

of the Emissions Factor of the Grid).

Grid data for calculation of baseline emission factor of grid

Table A3.1: Power Generation Mix of Rajasthan from the State Generating Stations11

Sr. No. Energy Source Net Generation in MkWh (2003-

2004) I. Rajasthan State 1. Thermal (coal) Kota TPS 6283.81 Suratgarh TPS 7524.32 Thermal (Coal) Total 13808.13 2. Thermal (Gas) Ramgarh Gas TPS 221.8 Thermal (Gas) Total 221.8 3. Hydro Mahi Bajaj Sagar 188.24 Rana Pratap Sagar 239.49 Jawahar Sagar 203.11 Anoopgarh 8.54 Small Hydro 11.44 Hydro Total 650.82 4. Wind Wind Total 104.67

11 Northern region-Annual Grid Report 2003-04

Table A3.2: Power Generation Mix of Rajasthan from the Central Generating Stations12 Sr No

Energy Source Generation (2003-2004)

II. Rajasthan’s share in Central Schemes In MkWh 1. Thermal (Coal) Singrauli TPS 2700 Rihand TPS 900 Unchar TPS Stage I 190 Unchar TPS Stage II 350 Thermal (Coal) Total 4140 2. Thermal (Gas) Anta 646 Auriya 549 Dadri 520 Thermal (Gas) Total 1715 3. Hydro Tanakpur 40 Salal 84 Chamera 207 Uri 190 Total Hydro 521 4. Nuclear RAPP II 1090 RAPP III 615 RAPP IV 404 NAPP 500 Total Nuclear 2609

12 Source - OrderonARR03-04ofRVPN –Table 8 – Power purchase cost from different sources

Table A3.3: Power Generation Mix of Rajasthan from the Power Stations in

Partnership Projects13 Sr No

Energy Source Generation (2003-2004)

III. Rajasthan’s share in Partnership Projects in MkWh 1. Thermal (Coal) Satpura TPS 630 Thermal (Coal) Total 630 2. Hydro BBMB - Bhakara 897 BBMB - Pong 644 BBMB - Dehar 631 Chambal - Hydro 244 Chambal - Satpura 681 BBMB for RFF 183 Hydro Total 3280

13 Source : OrderonARR03-04ofRVPN – Table 8 – Power purchase cost from different sources

Table A.3.4: Five most recent plants built in Rajasthan14

S.No. Year of Commissioning Energy Source Installed Capacity (for the unit) (MW)

Total Installed Capacity (MW) Million kWh (per annum)

1 Oct, 2003 Central Sector - Chamera – II (8.6% share) 3x100 3x100

99.5 Oct’ 2003-Sep’ 2004

2 Sep-2003 M/s Kalpataru Power Ltd. (Biomass) 7.0 7.0

30.857 Sep’ 2003-Aug’ 2004

3 Jul-2003 KTPS Stage IV (Coal) 195.0 1045.0 1148.04

Jul’ 2003-Jun’ 2004

4 Jun-2003 Suratgarh Stage –III (Coal) 250.0 1250.0 1583.21

Jun’ 2003-May’ 2004

5 Apr-2003 Ramgarh Gas Extn. (Gas) 37.5 103.5 213

Apr’ 2003-March’ 2004

14 Northern region-Annual Grid Report 2003-04

Emission factors

The emission factors are based on IPCC Guidelines for National Greenhouse Gas Inventories and are given below. Fuel Emission factor15 (tC/TJ) Emission factor (tCO2/TJ)

Natural gas 15.3 56.1

Sub-bituminous coal 26.2 96.1

15 Page 1.13, Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories: Reference Manual

Appendix A

Abbreviations

% Percentage APCL Alwar Power Company (P) Limited BM Build Margin CDM Clean Development Mechanism CEA Central Electricity Authority CER Certified Emission Reductions CM Combined Margin Cm Centimeter CO2 Carbon Di oxide CPSUs Central Power Sector Utilities DPR Detailed Project Report GHG Greeenhouse Gas IPCC Intra governmental Panel for Climate Change IPP Independent Power Producers IREDA India Renewable Energy Development Agency Kcal Kilo Calories Kg Kilogram Km Kilometer KP Kyoto Protocol KW Kilowatt KV Kilovoltage KWh Kilowatt hour LP Low Pressure MCR Mustard Crop Residue MNES Ministry of Non-Conventional Energy Sources MT Metric Tons MU Million Units MW Megawatt NGO Non Government Organizations NOC No Objection Certificate PDD Project Design Document PIN Project Idea Note PLF Plant Load Factor PPA Power Purchase Agreement QA Quality Assurance QC Quality Control RE Renewable Energy RSPCB Rajasthan State Pollution Control Board

RVPN Rajasthan Rajya Vidyut Prasaran Nigam Ltd RREC Rajasthan Renewable Energy Corporation Limited SEB State Electric Board STG Steam Turbine Generator T&D Transmission and Distribution TPH Tonnes Per Hours TJ Trillion Joule UNFCCC United Nations Framework Convention on Climate Change

Appendix B

REFERENCE LIST § Kyoto Protocol to the United Nations Framework Convention on Climate Change

(UNFCCC) § Website of United Nations Framework Convention on Climate Change,

http://unfccc.int § UNFCCC decision 17/CP.7: Modalities and procedures for a clean development

mechanism as defined in article 12 of the Kyoto Protocol § UNFCCC, Clean Development Mechanism, Project Design Document (CDM-

PDD) version 01 (with effect as of: August 29, 2002) § UNFCCC document: Annx B to attachment 3, Indicative simplified baseline and

monitoring methodologies for selected small scale CDM project activity categories

§ Further Clarification on Methodological Issues, EB 10 Report, Annex 1, http://unfccc.int

§ Annex 2 : Amendment to Appendix B of the Simplified Modalities and Procedures for Small-Scale CDM Project Activities, EB 12 Report. http://unfccc.int

§ Detailed project report on 7.5 MW Biomass based power project – Alwar Power Company Private Limited

§ Website of Central Electric Authority (CEA), Ministry of Power, Govt. of India- www.cea.nic.in

§ CEA published document “16th Electric Power Survey of India” § Website of Department of Energy, Government of Rajasthan -

http://www.rajenergy.com § Website of Ministry Non-Conventional Energy Sources (MNES), Government of

India, www.mnes.nic.in § Website of Indian Renewable Energy Development Agency (IREDA),

www.ireda.nic.in

§ Order on Annual Revenue Requirement Filed by Rajasthan Rajya Vidyut Prasaran Nigam Ltd. Dated 31st July 2003

§ Power Purchase Agreement between Project Promoter and Rajasthan Rajya Vidyut Prasaran Nigam Limited

§ District level biomass assessment study of Alwar District, Rajasthan prepared by Technology, Projects and Market Research Group, New Delhi